Interst Rates Down again by 1%

Andrew64

Japan had interest rates at 0% for the whole of the 90s and it didn't do any good at all - Japan stayed in recession all that time.

oldagetraveller

Fortunately managed to get all my savings into good fixed rate deals so sorry Darling Gordon you are not forcing me into spending.
In fact I'm spending much less to ensure best use of the interest from said savings.

nilrem_2

They want us to spend our cash rather than save it but what happens is that the people who are normally prudent and save won't suddenly start spending, what they will do is tie up their savings in fixed rate accounts to get the best interest rates making them even less likely to spend!

beecher

nilrem wrote: »

They want us to spend our cash rather than save it but what happens is that the people who are normally prudent and save won't suddenly start spending, what they will do is tie up their savings in fixed rate accounts to get the best interest rates making them even less likely to spend!

I have opened fixed rate accounts for the first time in my life so I agree with what you're saying. I'm certainly less likely to spend rather than more, but then again for the last few years it has been the people who are in debt who have kept the economy going, not those of us who are prudent so I doubt the government care.

manhattan

Andrew64 wrote: »

There's talk of interest rates being 0% next year! So the rates offered by banks and building societies won't be much above that! But I'm not going out and spending my savings just because the government wants us to.

People will end up putting their savings under the mattress! There will probably be a rush of people withdrawing billions from banks :eek:

manhattan

Shares in safe manufactures will be the best place for your savings

Old_Slaphead

What are you supposed to spend your money on - holidays, imported goods, gas & electric - how is that supposed to help things ?????

If I reduce my savings then the Gov't loses it's 20% tax rakeoff.

apt

While I feel sorry for those that have to rely on savings for income, and don't have that much sympathy for reckless borrowers, greedy buy-to-let speculators etc. the notion that interest rates should not cut with the consequence of a longer and deeper recession is ludicrous. Also there have been plenty of opportunities to get fixed rates of at least 6% for the next year. If they'd acted instead of wanting to whinge savers will be getting a good return for 2009.

nilrem_2

beecher wrote: »

I have opened fixed rate accounts for the first time in my life so I agree with what you're saying. I'm certainly less likely to spend rather than more, but then again for the last few years it has been the people who are in debt who have kept the economy going, not those of us who are prudent so I doubt the government care.

I can sort of understand why the government are not so concerned about savers, I am against a rate cut for selfish reasons but I imagine they are trying to help businesses and keep people employed but I don't feel that these rate cuts make a lot of difference anyway.

3 months ago industry was clamouring for a 1/2% cut and would have thought themselves lucky if they got it, the mistake the BOE made last time was to give such a large cut in one go rather than drip feeding it over a few months, now they expect a big cut every time!:eek:

nilrem_2

People will end up putting their savings under the mattress! There will probably be a rush of people withdrawing billions from banks :eek:

Even if; and it's a big IF the BOE rate did reach 0% it does not mean we would get a rate just above 0% the rates we earn on our savings are based more on the Libor rate now a days, most institutions will have to offer above 0% or they won't get funds from savers.